Wall Street is occupied with worries too
As anti-Wall Street protests crop up around the nation, many of the bankers and traders at the center of the storm are focused on a more immediate concern: keeping their jobs.
The financial industry shed 8,000 jobs in September, and 10,000 more are expected to be cut by the end of 2012. JPMorgan Chase posted a 13% drop in revenue this week, and next week mighty Goldman Sachs Group is widely expected to say it lost money for the first time since the financial crisis.
The woes the industry is facing now are in contrast to the success it experienced after the financial crisis — a success that helped stir up the current protests.
The anxiety rippling through banks and trading floors has generated some unexpected Wall Street sympathy for the protesters. Elliott Roman, a trader who works near the demonstrations, said that on his way home, in his suit and tie, he had a friendly exchange with a protester who asked him to join the movement.
“Without a doubt they are here preaching to the choir, so to speak,” said Roman, a trader at Direct Access Partners. “We’re feeling it. Volumes are down throughout the industry. Everyone is feeling it.”
For others in the neighborhood, though, the crowds chanting about Wall Street greed have just been an insult to add to their injured state.
“The business is hard enough as it is; this isn’t something we additionally want to deal with,” said Keith Bliss, a senior vice president at Cuttone & Co. “The business and economic environment giving fodder to these people — we’re also struggling with on Wall Street.”
The news of Wall Street’s struggles has not drawn much empathy among protesters, many of whom argue that the financial system should shrink.
Monica Espinosa, an unemployed administrative assistant from Long Island, responded angrily when a man in a suit and tie approached her in Manhattan’s Zuccotti Park and told her that “we’re suffering too.”
“He suffered in numbers — he lost stocks,” said Espinosa, who was carrying a sign that read, “Bankers stop stealing.” “We suffered in reality.”
Statistics put out by the New York state comptroller this week indicate that securities industry employees make, on average, almost six times more than other workers in the state.
But while some of the casualties of the current retrenchment have been pinstripe-wearing bankers who meet the Wall Street stereotype, the majority have been young college graduates and back-office workers who make up the rank and file of the industry. Barring a few days of stubble and some cuff links, they could fit in among the protesters packing into the park.
“Yes, there are a select few who get paid tons, but most people who work on Wall Street, we’re just doing our jobs,” said Eric Scott, an employee at a trading firm who got into an argument with protesters while passing by during his lunch hour this week. “We can lose our job and be on the street just like these guys in the blink of an eye.”
Back in 2007, the financial industry was one of the first to see layoffs during the financial crisis, but it also bounced back sooner and more fully than the rest of the economy.
But this time around, few analysts expect the industry to bounce back in the same way, given the economic climate and new regulations put in place since the crisis.
The situation is not causing problems everywhere in the finance industry. At consumer banks like Wells Fargo & Co. and U.S. Bancorp, the improving credit of ordinary Americans is expected to boost results this quarter.
But at the trading firms and investment banks that New York relies on, the tough economic times have been felt across the board.
Some of the changes have been superficial, like the limitations on business class flights and after-hours meals for investment bankers at Barclays. But the British bank has also announced that it is doing away with 3,000 jobs — and it is one of many banks where it has been rumored that year-end bonuses for remaining employees could drop to zero.
As they contend with these cuts, the bankers are also being confronted with the ever-expanding reach of the Occupy Wall Street demonstrations.
New York Stock Exchange traders have had to alter their commutes because Zuccotti Park is located between Lower Manhattan’s transit hubs. And police have set up a growing maze of metal barricades that slow down foot traffic in the financial district.
Though the protesters have mostly kept to the park, on Tuesday afternoon they took their anger to the homes of bankers on a “Millionaires March” that snaked up Park Avenue to the apartment of JPMorgan Chief Executive Jamie Dimon.
Students at Columbia University responded to a planned visit Wednesday by Goldman Sachs CEO Lloyd Blankfein by organizing protests around a “School the Squid” theme — a reference to the Vampire Squid nickname Goldman was given by a Rolling Stone writer. Blankfein canceled his appearance at the last minute, citing a scheduling conflict.
Further down the financial totem pole, young analysts and traders at big-name firms are wisely keeping a lower profile amid the public anger.
“There was a period where you could put on the Morgan Stanley or Goldman Sachs sweatshirt and wear it to the beach,” said Brad Hintz, a bank analyst who was previously the chief financial officer at Lehman Bros.
Now the corporate pride is disappearing along with the jobs.
“There are a lot of people whose careers will be foreshortened,” Hintz said. “Although Wall Street is very well paid, it is also facing the pains — just not the same pains as the auto worker.”